Qualcomm Q1 FY26 net income drops 6% to $3bn

Financial Performance - Qualcomm reported a net income of $3 billion for Q1 FY26, a 6% decrease from $3.18 billion in the same period last year [1] - The company achieved revenues of $12.3 billion for the quarter, marking a 5% increase from $11.7 billion in Q1 FY25 [1] - Earnings per share (EPS) for Q1 FY26 were $2.78 on a GAAP basis, slightly down from $2.83 in the previous year, while non-GAAP EPS rose by 3% to $3.50 from $3.41 [2] Segment Performance - The Qualcomm CDMA Technologies (QCT) segment reported a 5% increase in revenue, reaching $10.6 billion, driven by a 3% increase in handset sales totaling $7.8 billion and a 15% rise in the automotive sector generating $1.1 billion [2] - The Internet of Things (IoT) division saw a 9% increase in revenue, contributing $1.7 billion to the total [3] - Qualcomm Technology Licensing (QTL) segment revenues increased by 4% to $1.6 billion, with earnings before taxes rising by 6% to $1.2 billion [3] Shareholder Returns - Qualcomm returned $3.6 billion to shareholders in Q1 FY26, which included $949 million in cash dividends and $2.6 billion through the repurchase of 15 million shares of common stock [3] Future Outlook - For Q2 FY26, Qualcomm anticipates challenges such as memory supply constraints affecting demand from several handset customers, with revenue guidance estimated between $10.2 billion and $11.0 billion [4] - QCT revenues are projected between $8.8 billion and $9.4 billion, and QTL revenues between $1.2 billion and $1.4 billion [4] Strategic Acquisitions - Qualcomm completed a $2.4 billion acquisition of Alphawave Semi to expand its presence in the data center market, aligning with its strategy to diversify business operations [5] - The company also acquired Ventana Micro Systems to reinforce its position in the RISC-V standard and ecosystem, enhancing its CPU capabilities [6] Innovation and Product Development - Qualcomm focused on innovation during Q1, particularly in AI and digital transformation, with Bytedance launching the first agentic AI smartphone powered by the Snapdragon 8 Elite platform [7] - At CES, Qualcomm presented 18 Snapdragon-powered PCs in collaboration with partners, with the Asus Zenbook A16 identified as the fastest among them [8]